Physical performance is also improved for the majority of the seven enterprise types examined, provisional figures from the annual Business Pointers costs of production benchmarking project show.

However, the continuing rising fixed and variable costs in the sector are restricting margins for many producers despite improved market conditions and greater on-farm efficiency is needed to counteract their negative effect.

“We are still collating and analysing the data that informs the annual Business Pointers benchmarking report for beef and sheep producers but initial signs are more encouraging than they have been in recent years,” said Mark Topliff, EBLEX senior analyst.

“The higher cattle prices we saw in the latter part of the year to March 31 2011 are not immediately reflected in overall performance but they will continue to filter through so there is definitely cause for optimism. On the sheep side, net margins are clearly up for lowland flocks and less favoured areas when all costs are taken into account.

“Across all seven enterprise types, only one category – lowland sucklers – saw a worsened physical performance in the provisional figures, compared to the 2010 data.

“Again, it is rising costs that appear to have been the biggest single obstacle to better returns, yet the top third producers across all enterprises are showing positive margins. We need to look at what specific business practices they are employing and ensure that these are highlighted across the sector to help improve efficiency and, ultimately, the bottom line.

“The climate is still not easy but the potential is there for improved performance for most enterprises.”

The full Business Pointers report is due to be published in October. Ahead of this, in September, “per kilo” costs of production figures for both cattle and sheep enterprises will be published.

Last year’s Business Pointers figures can be found in the Better Returns Programme pages of www.eblex.org.uk